amortization of Excise

vijayanderson · 2009-03-03

Hi All,

How to setup structure for following values

Amort Excise is calculated @ 10% per piece

qty = 1000; price = 10

Basic Amt (A)= 10000
Amor exice (B)% = 1000

Total (C = A+B ) = 11000

Excise(D= 8% of C) = 880

Total (E = C+D) = 11880

Vat (F= 4% of (A+ 8% of A)) = 720

Total Value = 11880+720 (E+F)

can it be done without customization.

Thanks & Regards,
Vijay

ssingla · 2009-03-03

Amortization to the extent I understand is the additional levy of excise if part of machinery or know how is supplied by the customer to the client which enables the client to produce goods. As per excise rule the cost of the machinery should be taken into consideration while calculating excise duty on sale price For E.g. :
If a machinery costing 1,00,000 is supplied by customer and the machine is capable to produce 1000 qty of item, The assessable value on which the excise will be calculated will be as follow:

Sale Price + (1,00,000/1000) i.e. Sale Price + 100.

In your example I am thing the price on which the tax will be calculated will be base price (10000) + excise duty ((10000+1000)*8/100)= 880.

Correct me if I am wrong

ssingla · 2009-03-03

The solution to your problem is to use assessable value to calculate the excise.

vijayanderson · 2009-03-04

Absolutely Right, it applies to only for the component produced using custormers machine . How do i go about it..

ssingla · 2009-03-04

You need to define Excise calculation type "Assessable Value" in excise posting setup and assessable value needs to be defined in the item card and sales invoice.

vijayanderson · 2009-03-04

No the problem is they are calculation Excise amount twice, for example the calculate Excise amt for Amortization value and then calculate normal excise for all put together and vat for the sum of basic value and excise amount. I tried using charges for it, but can they claim cenvat credit for it if they use charges..

ssingla · 2009-03-04

have a recheck because ammortization value is just used to calculate increased Excise (i.e. including the cost of machine) but it is not charged to the customer. So the total amount to customer will be :

Basic Price
Excise Duty ((Basic Price + Ammortization value)*excise rate)
VAT/CST (Basic Price + Excise Duty)
charges if any

P.S. Are you considering it for Sales or Purchase

vijayanderson · 2009-03-10

Hi singla,

What you have said is correct , I dont think its possible to use excise calculation based on assessable Value. Here i have given an example how its being processed.

Cost of Tool = 10
Total Qty = 200
Price = 50
Tool Amortization cost ( 200* 10) = 2000

Total Assessable value (200 * 50 ) = 10000
Excise Duty @ 10 % ( 10000*10%) = 1000
Duty on Amortization @ 10% ( 2000*10%) = 200
ecess amount ( [1000+200] * 2% ) = 24
shecess amount ( [1000+200] * 1% ) = 12
VAT @4 % ( [10000+1000+24+12] * 4%) = 441
Totamt (10000+ 1000+200+24+12+441) = 11677.

Hope this is much more clear.

Regards,
Vijay

ssingla · 2009-03-10

Define a customized field "Tool Amortization Value" in the item and sales line table . Write code to calculate assessable value as Unit Price + Tool Amortization value. Assessable value will be copied to sales line from the item card. If excise calculation of BED is "Assessable %" then the excise will be calculated accordingly.
For printing display line amount, assessable value (Tool Amortization value on sales line * qty), give a subtotal and then excise.

We are using the same since 2 years in a implementation and is working fine.

vijayanderson · 2009-03-11

Then Vat will be calculated for the amount including Amortization value.. Here VAT is calculated excluding Amortization excise amount.. ](*,)

ssingla · 2009-03-12

vijayanderson wrote:

Then Vat will be calculated for the amount including Amortization value.. Here VAT is calculated excluding Amortization excise amount.. ](*,)

Amortization Excise value is only used for calculation of excise amount and it will have no bearing on the VAT amount.
There is a difference between Excise and VAT

vijayanderson · 2009-05-20

Can Excise calculated twice Using structure for the above amortization setup.

i.e In Structures,

Can I define Excise twice, 1 Using Percentage and the other based on number of quantity..

ssingla · 2009-05-21

vijayanderson wrote:

Can Excise calculated twice Using structure for the above amortization setup.

i.e In Structures,

Can I define Excise twice, 1 Using Percentage and the other based on number of quantity..

Never done it but the answer is no. The excise calculation is done using the setup i.e. Excise Business Posting & Excise Product Posting Group. So if you define it twice it will calculate it twice on same % and not on different.

vijayanderson · 2009-06-01

Hi,

1) I just worked out on another solution kindly suggest weather its correct way to follow,

In Excise Posting Setup,I have defined
a) Basic Excise Duty
Bed Calculation type =Excise %
BED % = 8
b) Special Excise Duty
SED Calcultation type = % of Accessable Value
SED % = 8

c) She cess & E Cess = Inclusive of both.

I am getting all the values correctly but is using SED is correct in this situation?

2) My client does not want excise to be rounded off, so in GL setup , excise rounding precision I have given 0.01. But when I try to post I get following error.
"Amount -***** needs to rounded in G/L entry no=**"

Hope to get a reply

Thanks

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